By Dale Porfilio, Chief Insurance coverage Officer, Insurance coverage Data Institute
As a part of its ongoing work to boost consciousness of the impacts of authorized system abuse, the Insurance coverage Data Institute (Triple-I) launched a multi-faceted marketing campaign specializing in Georgia. The marketing campaign contains an Interstate 20 billboard in Downtown Atlanta and digital billboards on bus stops and different city panels throughout the Metro Atlanta space.
Georgia tops the newest record of locations that the American Tort Reform Basis (ATRF) calls “judicial hellholes,” states and counties the place the group believes judges in civil circumstances systematically apply legal guidelines and courtroom procedures typically to the drawback of defendants. Based on ATRF, Georgia earned this rating as a consequence of continued “excessive nuclear verdicts and liability-expanding choices by the Georgia Supreme Court docket.” The state made the record for the primary time within the report for 2019-2020, debuting at quantity 6.
Triple-I and key insurance coverage trade stakeholders outline authorized system abuse as policyholder or plaintiff legal professional practices that enhance prices and time to settle insurance coverage claims, together with conditions when a disputed declare may have been resolved with out judicial intervention. Insurers’ authorized prices for claims can mount with the growing variety of lawsuit filings, prolonged litigation, and outsized jury awards (awards exceeding $10 million). Information from the Insurance coverage Analysis Council (IRC) signifies that legal professional involvement can enhance claims prices and the time wanted to resolve them, even whereas lowering worth for claimants.
Auto insurance coverage litigation, for instance, is a rising concern in Georgia as information reveals protection affordability for Georgians on this product space has been considerably waning quicker than in every other state. An August 2024 report, Private Auto Insurance coverage Affordability in Georgia, issued by IRC, ranked Georgia forty seventh when it comes to auto insurance coverage affordability. Private auto insurance coverage expenditures accounted for two.0 % of Georgians’ median family earnings, in contrast with a 1.5 % share nationwide. Auto insurance coverage spending in Georgia grew at 5.6 % annualized between 2014 and 2022, in contrast with 3.3 % within the nation total.
In the meantime, authorized service suppliers spent over $160 million on promoting in Georgia in 2023, based on preliminary information from the American Tort Reform Affiliation (ATRA).
Earlier this 12 months, a Triple-I problem temporary, Authorized System Abuse: State of the Threat, highlighted elements of authorized system abuse, together with how legislation agency promoting spend for mass tort circumstances would possibly play a task in elevated filings nationwide. Trial attorneys and third-party litigation funders in search of extra income might use promoting to amp up recruitment for lawsuits with large payouts on the expense of policyholders. A 2023 Triple-I examine, Impression of Rising Inflation on Private and Business Auto Legal responsibility Insurance coverage, estimates that growing inflation drove loss and DCC (protection containment prices) larger in each insurance coverage traces – by 6.5 % ($61 billion) of whole loss and DCC for private auto and by 19 to 24 % ($35 to $44 billion) for industrial auto.
Triple-I’s multi-faceted consciousness marketing campaign to assist educate Georgians in regards to the mounting prices of authorized system abuse within the state additionally contains content material reminiscent of a video assertion by CEO Sean Kevelighan and interviews capturing the opinions of customers about authorized system abuse.
Protection affordability is a rising concern for a lot of policyholders nationwide. Whereas a number of elements might impression insurance coverage premiums, pointless and extreme litigation can drive larger loss ratios whereas posing formidable challenges to prediction and mitigation. Triple-I is dedicated to advancing conversations with enterprise leaders, authorities regulators, customers, and different stakeholders to assault the danger disaster and chart a path ahead.
We invite you to hitch the dialogue by registering for JIF 2024. Comply with our weblog to study extra about developments in insurance coverage affordability and availability throughout the property and casualty market.